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What is a Grant and How Does it Work

The phrase, “You have to have money to make money”, gets thrown around a lot in the modern world. The sad fact is that this is often the case. What this means is that social mobility is incredibly difficult to achieve, without some external help. Those who are less fortunate, or are of a particular background, ethnicity, or gender can be eligible for specific grants to help redress the balance. This article aims to explain what a grant is and how they work. 

What Is A Grant?

A grant is essentially a loan that you don’t have to pay back. Free money sounds good, right? Grants aren’t just given out to anyone and everyone, there is usually a specific amount of money set-asides by a government body or private company to help a particular group of people. It’s possible to find specific grants for women as well as for other sections of society who tend to be unfairly discriminated against. For instance, governments may want to encourage women to start businesses or get a degree in an area that is traditionally very male-oriented. They could also be given to an ethnic minority group in a place where there is a very uneven distribution of wealth. Grants are designed to redress the balance in lots of different ways. 

Why Do They Exist?

Grants exist to help those who are less fortunate than others. Although you might just be able to turn up to a bank to get a loan, there is a history of discrimination against minority groups, and lenders may reject applications if they have no collateral. This puts groups of people who are from less wealthy backgrounds at a severe disadvantage and increases the societal divide. Asides from governments putting up money to try and better society, private businesses may also have an interest in providing grants to people in need. Usually, these businesses will stand to gain from either investing in someone’s education or supporting a new company. These types of grants are closer to investments for private firms. Less common but still around are grants from wealthy philanthropists. These are normally set up by someone who has a particular interest in, for instance, seeing more women in engineering. Perhaps they struggled to get to where they are and now want to give back. These are some of the reasons why grants exist.

How Do They Work?

Grants work by supplying those in need with the financial help they may need. The process involves an application to the body that is in charge of the grant. These applications are generally very lengthy and may involve a bunch of interviews. As this is free money they have to make sure they are giving it out to the right people. You will need to put down a strong business plan and a clear explanation of how much money you’d need and exactly how you would spend it. These applications are used to decide how much to award you if you are successful. Quite often, the amount of money they can give out individually is not fixed so you should aim for an ideal but realistic amount. There will also be regular check-ups on how your business is getting on after you are awarded the money, to make sure it is being spent how you said it would be. 

Where Can I Find One?

Grants are available from several different places. From local authorities to countrywide government funds, there will be different grants available for different things. You can search your government’s website to find a list of all the grants that are currently accepting applications. To find a private one, you may have to go to individual businesses’ websites to find more information. Try to search for large companies who work in the same sector as you and you might be able to find a good match. Sending off a few key emails may also get you information about grants that aren’t so widely publicized. Finding out about grants from generous philanthropists can be more difficult, but with a bit of research, you should be able to find out about any that are relevant to you. These are just some of the ways you can find a grant.

Who Is Eligible?

Eligibility for grants varies across countries and sectors. The general through-thread for those who are eligible for grants are those who are in some way disadvantaged, compared to the average person. When it comes to grants for businesses, they may be given out to people who want to start a social enterprise that would help the community. A bank might be less willing to lend money for something like this as it would not be run for profit. They could also be given out to those who want to start a local business in an area where there has not been a lot of development. The theme is that the grant will benefit those in need who may not have a way of increasing their social mobility. In terms of educational grants, these are usually eligible to those who are highly desired in a specific field – due to low application numbers. Sometimes this is not due to disadvantaged groups, some countries might want to encourage people to become doctors and as such offer to pay for their university tuition fees. Grants are eligible to those who are most in need of a helping hand.

There Is No Such Thing As A Free Lunch

Grants are a great way of redressing the balance in society. They are provided by governments, private businesses, and philanthropists. You can be eligible for a grant if you have a business proposition that may benefit a disadvantaged group of people, or if you are from a disadvantaged group. Applying for these grants is a lengthy and intense process but if you are in need, don’t be discouraged. The extent of the checks is just to make sure they give the money to the right people. If you have a worthy cause and make a good case, you might just get what you need. I hope this article has helped you understand what a grant is and how they work.

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